Convertible Bonds or Bonds with Warrants : An Approach Using Sequential Financing

The context for this article is the problem of funding through the issuing of debt associated with a call option on shares to be issued: convertible bonds and bonds with warrants. The securities studied are generally considered to be the same in the literature. The aim of this article is to propose a study of a sequential financing model that integrates one of the objective differences between these two securities, the difference observed between the cash flow sequences resulting from the issue. We will deduce the characteristics that lead companies to issue either convertibles or bonds with warrants